Internal briefings warn Qld Treasurer ‘major shifts’ needed, as LNP blasts blowouts

The news

Queensland’s new LNP government will push a regular end-of-year budget update into early 2025 as it continues to release details of increased project costs under Labor.

The decision comes amid detail from internal briefings for new Treasurer David Janetzki warning of “major shifts” needed to “move back towards fiscal sustainability”.

Despite the negative picture being painted of the budget by the LNP, Treasurer David Janetzki says the party will still “be delivering on our promises” now in government.Credit: Brisbane Times

First reported by The Australian Financial Review and seen by this masthead, a limited section of the briefing noted capital spending was boosting debt and credit rating risks.

But Janetkzi told journalists on Tuesday the departmental advice did not jeopardise the LNP’s key budget-related election promises – still raising questions among experts and Labor.

An assessment of the medium term fiscal outlook ... against trends in debt and interest burdens supports a need for stabilisation and improvement of fiscal performance to move state finances to a more sustainable footing.

Snippet of department briefing to Treasurer David Janetzki

Why it matters

LNP leader David Crisafulli sought to banish Newman-era ghosts by “empower[ing] the public service”, while vowing to lower debt, reduce taxes, and rule out asset sales or job cuts.

This was to be achieved by suggestions the party could, in government, trim $6.8 billion over four years from consultant and contractor spending – though delivering only marginally lower debt.

After weeks of drip-fed details about cost increases on infrastructure projects, new details have emerged muddying the true cost of the multibillion-dollar Copperstring energy grid upgrade.

And while promising to deliver major projects on time and budget, aided by scrapping a union-friendly procurement policy, ministerial accountability appears to have been watered down.

What they said

The portion of the treasury briefing seen mentions “major shifts” to return to “fiscal sustainability”, but the government has not responded to a request to release wider sections of the advice.

“I have made the decision that we will push MYEFO [the mid-year economic and fiscal outlook] into the new year,” Janetzki told journalists at a parliament media conference.

“Given the extent of the blowouts and what we need to get our head around, it’s important that we do that appropriately, calmly, methodically.”

Asked if budget details made known to the LNP since its election win could impact the vows to voters, Janetzki said: “We’ll be delivering on our promises.”

He said a message needed to be sent to ratings agencies – whose credit scores, when lowered, can drive up state debt interest payments – that the new government was taking their advice seriously.

“My first official meeting as treasurer was with [ratings agency] S&P because I wanted to send a number of clear messages,” he said of decisions to not support some of Labor’s big spending plans.

Another point of view

In comments to the AFR, S&P Global government ratings director Anthony Walker said while it was too early to analyse LNP budget plans, the firm was keen to know about funding for LNP promises.

“And whether they can actually achieve the large cost savings that they’ve promised,” Mr Walker said.

Labor’s shadow treasurer, Shannon Fentiman, said the “fallacy” the LNP could cut almost $7 billion in forecast consultant fees from an actual spend closer to $50 million was “of huge concern”.